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We have not seen so many financial trouble signs all come together at one time like
this since just prior to the last major financial crisis in 2008. It is almost as if a “perfect storm” is brewing, and a lot of the “smart money” has already gotten out of stocks and bonds. Could it be possible that we are heading toward another nightmarish financial crisis?
So writes Michael Snyder (theeconomiccollapseblog.com) in edited excerpts from his original article* entitled 18 Signs That Global Financial Markets Are Entering A Horrifying Death Spiral.
[The following article is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Snyder goes on to say in further edited, and in some places paraphrased, excerpts:
A lot of people believe that we will never see another major financial crisis like we experienced in 2008…and that this type of “doom and gloom” talk is foolish. [Unfortunately,] it’s those kinds of people that did not see the last financial crash coming and are choosing not to prepare for the next one even though the warning signs are exceedingly clear. Let us hope for the best, but let us also prepare for the worst, and right now things do not look good at all.
You can see it coming, can’t you? The yield on 10 year U.S. Treasuries is skyrocketing, the S&P 500 has been down for 9 of the last 11 trading days and troubling economic news is pouring in from all over the planet. The much anticipated “financial correction” is rapidly approaching, and investors are starting to race for the exits.
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The following are 17 signs that global financial markets are entering a horrifying death spiral…
#1 The yield on 10 year U.S. Treasuries [keeps rising]…
#2 Rapidly rising interest rates are spooking investors and causing them to pull money out of bonds (primarily foreigners and specifically those from China and Japan) at a very rapid pace…
#3 Thanks to rapidly rising bond yields, some of the largest exchange-traded bond funds such as
- The $18 billion iShares iBoxx $ Investment Grade Corporate Bond fund (ticker: LQD) is down 7.9% since May 2nd
- The 3.7 billion iShares Barclays 20+ Year Treasury Bond (TLT) has plunged 15.9% during the same period
- The iShares Barclays 3-7 Year Treasury Bond fund (IEI) has fallen 3.2% since May 2.
are getting absolutely hammered right now.
#4 In recent weeks we have witnessed the largest cluster of Hindenburg Omens that we have seen since prior to the last financial crisis.
#5 George Soros has bet a tremendous amount of money that the S&P 500 is going to be heading down.
#6 At this point, the S&P 500 has fallen for 9 out of the last 11 trading days.
#7 Margin debt has spiked to extremely dangerous levels. This is a pattern that we also saw just before the last financial crash and just before the dotcom bubble burst…
#8 The growth rate of new commercial bank loans and leases is now the slowest that it has been since the end of the last financial crisis.
#9 According to a shocking new report, Fannie Mae and Freddie Mac are masking “billions of dollars” in losses. Will they need to be bailed out again just like they were during the last financial crisis?
#10 Wal-Mart reported very disappointing sales numbers for the second quarter. Sales at stores open at least a year were down 0.3%. This is a continuation of a trend that has been building for years.
#11 U.S. consumer bankruptcies just experienced their largest quarterly increase in three years.
#12 The velocity of money in the United States has hit another stunning new low.
#13 The massive civil unrest in Egypt threatens to disrupt the steady flow of oil out of the Middle East…
#14 European stocks just experienced their biggest decline in six weeks.
#15 The Japanese national debt recently crossed the quadrillion yen mark, and many are expecting the Japanese financial system to start melting down at any time.
#16 In Indonesia, the stock market is “cratering”.
#17 In India, the yield on their 10 year government bonds has skyrocketed from 7.1 percent in May to 9.25 percent now.
As the coming months unfold, keep a close eye on the “too big to fail” banks both in Europe and in the United States. When the next great financial crisis strikes, they will play a starring role once again. They have been incredibly reckless, and as James Rickards told Greg Hunter during an interview the other day, we are in much worse shape to deal with a major banking crisis than we were back in 2008… stating “You’re going to have a banking crisis worse than the last one because the banking system is bigger without the resources because the Fed is tapped out.”
Conclusion
We never even came close to recovering from the last financial crisis and the last recession and now the next major wave of the economic collapse is coming up quickly. I hope you are taking this time to prepare for the approaching storm, because it is going to be very painful.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://theeconomiccollapseblog.com/archives/18-signs-that-global-financial-markets-are-entering-a-horrifying-death-spiral
Other Articles by Michael Snyder:
1. Shift From U.S. Dollar As World Reserve Currency Underway – What Will This Mean for America?
Today, more than 60% of all foreign currency reserves in the world are in U.S. dollars – but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift] is going to have massive implications for the U.S. economy. [Let me explain what is underway.] Words: 1583 Read More »
There is one vitally important number that everyone needs to be watching right now, and it doesn’t have anything to do with unemployment, inflation or housing. If this number gets too high, it will collapse the entire U.S. financial system. The number that I am talking about is the yield on 10 year U.S. Treasuries. Here’s why. Words: 1161; Charts: 2 Read More »
All of this talk about a “bright future” for real estate is just a bunch of nonsense. The yield on 10-year U.S. Treasuries is starting to rise aggressively again and, because mortgage rates tend to follow such increases, mortgage rates are going up. As monthly payments go up less people will be able to afford to buy homes at current prices and this will force home prices down. As such, another great real estate crash is inevitable. Let me explain further. Words: 995 ; Charts: 1 Read More »
Never before has the world faced such a serious debt crisis. Yes, in the past there have certainly been nations that have gotten into trouble with debt, but we have never had a situation where virtually all of the major powers around the globe were all drowning in debt at the same time. Right now, confidence is being shaken as debt levels skyrocket to extremely dangerous levels. Many are openly wondering how much longer this can possibly go on. [Here’s my take on the situation.] Read More »
Anyone that thinks that the U.S. economy can keep going along like this is absolutely crazy. We are in the terminal phase of an unprecedented debt spiral which has allowed us to live far, far beyond our means for the last several decades. Unfortunately, all debt spirals eventually end, and they usually do so in a very disorderly manner. Read More »
The pension nightmare that is at the heart of the horrific financial crisis in Detroit is just the tip of the iceberg of the coming retirement crisis that will shake America to the core. As a society, we have made trillions of dollars of financial promises to the Baby Boomers, and there is no way that we are going to be able to keep those promises. The money simply is not there. Read More »
7. Bonds Getting Slaughtered, Interest Rates to Rise Dramatically, Economic Bubbles to Implode
What does it look like when a 30 year bull market ends abruptly? What happens when bond yields start doing things that they haven’t done in 50 years? If your answer to those questions involves the word “slaughter”, you are probably on the right track. Right now, bonds are being absolutely slaughtered, and this is only just the beginning. So why should the average American care about this? Read More »
8. Rapidly Rising Interest Rates Could Lead to Financial Collapse – Here’s Why
The global financial system is potentially heading for massive amounts of trouble if interest rates continue to soar. So what does all this mean exactly? [Let me explain.] Read More »
9. Rising Interest Rates Could Plunge Financial System Into a Crisis Worse Than 2008 – Here’s Why
If yields on U.S. Treasury bonds keep rising, things are going to get very messy. What we are ultimately looking at is a sell-off very similar to 2008, only this time we will have to deal with rising interest rates at the same time. The conditions for a “perfect storm” are rapidly developing, and if something is not done we could eventually have a credit crunch unlike anything that we have ever seen before in modern times. Let me explain. Read More »
Just the mere suggestion that this round of quantitative easing will eventually end if the economy improves is enough to severely rattle Wall Street. U.S. financial markets have become completely and totally addicted to easy money, and nobody is quite sure what is going to happen when the Fed takes the “smack” away. When that day comes, will the largest bond bubble in the history of the world burst? Will interest rates rise dramatically? Will it throw the U.S. economy into another deep recession? Can the Fed fix this mess without it totally blowing up? Read More »
At some point we are going to see another wave of panic hit the financial markets like we saw back in 2008. The false stock market bubble will burst, major banks will fail and the financial system will implode. It could unfold something like this: Words: 660 Read More »
Wall Street has been transformed into a gigantic casino where people are betting on just about anything that you can imagine. This works fine as long as there are not any wild swings in the economy and risk is managed with strict discipline but, as we have seen, there have been times when derivatives have caused massive problems in recent years – the government bailout because of derivatives at AIG; the failure of MF Global because of bad derivatives trades; and the 6 billion dollar loss that JPMorgan Chase recently suffered because of derivatives – [but the next] derivatives panic that comes will destroy global financial markets, and the economic fallout from the financial crash that will happen as a result will be absolutely horrific. [Let me explain my contention.] Words: 1485 Read More »
The Fed (and the Central Banks globally) are now juggling too many balls while at the same time they are not paying attention to what is happening to the middle class, (which is shrinking in size thanks to the monetary policies of the Big Banks). As the middle class shrinks, the very foundation of our economy is trembling which is going to result in the Fed dropping balls. Once the first one drops, others will follow and then things will get ugly fast, as electronic trading will enable a cascade (dare I say crash) in falling stock prices, since the biggest traders will be the first to jump ship by selling short leaving all the little people to sink or swim for themselves!
This is why I see the value of PM’s not only returning to previous highs but rocketing upward to new record levels as stock investors rush toward the financial stabilization that PM’s provide over the long term.